Back in December 2002, syndicated columnist George Will noted that, when it comes to the commercial airline industry in America, “crisis is normality.” The industry, Mr. Will continued, “has not netted a nickel since Kitty Hawk.” No one disputed then that Mr. Will was correct, and the industry’s finances have only deteriorated since. But according to officials of airline unions like Association of Flight Attendants (AFA-CWA) union President Pat Friend, this remarkable record of failure can be attributed only to a century-long spell of inexplicably bad management!
Major airline carriers such as U.S. Airways, United, and America West are losing billions of dollars annually as a result of “disastrous business decisions,” insisted Ms. Friend in a press release issued right after U.S. Airways’ Christmas 2004 fiasco. On Christmas Eve, hundreds of the struggling airline’s employees called in sick, forcing the bankrupt carrier to cancel 455 flights over four days. Flight attendants and baggage handlers reportedly called in sick at roughly triple the average rate. Union militants, whether acting in concert or not, were clearly protesting pay cuts and work-rule changes at a time when they believed they could do the most damage to the company. Because the impact of the “sick out” was compounded by unusually bad weather, thousands of passengers were left stranded for days and countless bags were mishandled, piling up at airports.
Urging management, the traveling public, and journalists covering the industry to ignore the obvious, Ms. Friend now denies that a sick out was orchestrated. But less than two weeks before Christmas, she publicly boasted that union militants were mobilizing for “CHAOS (Create Havoc Around Our System), AFA’s trademarked tactic of surprise, intermittent strikes on flights, dates and locations chosen solely at the union’s discretion.” Meanwhile, the AFA’s U.S. Airways unit President Perry Hayes acknowledges that “a minority of employees...appear to have decided to take some type of action against the company,” but doesn’t admit that the union hierarchy bears any responsibility for the fact that U.S. Airways “failed miserably” over the holiday. Instead, he blames “the employees who took this action,” which “may ultimately cause the failure of this airline.”
Both Ms. Friend and Mr. Hayes dodge the key reason U.S. Airways and several other major carriers may soon be liquidated. Employee compensation accounts for 35-40 percent of all expenses for major airlines, far higher than in most industries, and airlines have little ability to control expenditures on fuel, their second greatest expense. Therefore, improving employee productivity, rewarding employees in accord with their personal performance, and financing employee benefits in the most cost-effective way possible are even more important for the survival of airlines than they are for that of other businesses. But federal labor policies dating back to the 1920’s make it extremely difficult for airlines to manage employees effectively and stay profitable over time.
Under the Railway Labor Act’s (RLA) 1934 Amendment, if the federal government deems that a railroad or airline union has the support of a majority of the employees in a federally delineated “bargaining unit,” then all employees in that unit, whether members of the union or not, must accept that union as their “exclusive” bargaining agent. That means only officials of the designated union may negotiate with the employer over the pay, benefits, and working conditions of all employees within the unit.
Even employees who have good reason to believe they could get a better contract by negotiating on their own rather than through the union may not bargain with their employer individually without a union official’s permission (which is virtually never granted). In upholding union officials’ “right” to prevent non-union workers from bargaining for themselves, which Congress later authorized for nearly all private businesses, the Supreme Court explained in 1944 that the “practice and philosophy of collective bargaining looks [sic.] with suspicion on...individual advantages.”
Seventeen-years after passing the monopoly-bargaining amendment, Congress tightened Big Labor’s monopoly control over transportation employees’ ability to bargain with their employer. The 1951 RLA Amendment empowers railroad and airline officials in all 50 states, including Right to Work states that ban forced union membership and dues for most employees, to get employees fired if they refuse to join or bankroll a union. Consequently, the especially talented and conscientious employees who are severely shortchanged as a result of union officials’ monopoly control over bargaining may not even protest by refusing to pay union dues or so-called “agency fees.” If they do, they’ll be terminated.
As economist William T. Wilson explained in a 2002 study for the Harrisburg, Pennsylvania-based Commonwealth Foundation:
[Union monopoly bargaining] typically has the perverse effect of reducing the pay of the most productive workers while increasing compensation of less productive workers. Any system that grants union officials the legal power to impose unwanted union representation on its most productive workers, and then forces them to pay for it, ultimately lessens the income and the standard of living of all....
While union monopoly bargaining has severely dampened employees’ incentive to improve their productivity in many private industries, airlines have long been the most egregious example. (Government, of course, is another story altogether.) In all the major carriers and even most discounters, employees are subject to union monopoly control. Flight attendants, baggage handlers, customer greeters, and ramp agents learn from experience that they can’t improve their pay, benefits and job security by doing a better job. Consequently, to better themselves, they must collectively push to get a bigger share of a shrinking pie.
No wonder labor-management relations in the airlines are probably the worst of any industry in America, or that angry and frustrated employees went so far as to hold the recent sick out that may turn out to be the death knell of U.S. Airways. The bulk of the blame lies not with several hundred union zealots who called in sick, nor with the company’s hamstrung management, nor even with union bigwigs like Ms. Friend and Mr. Hayes.
The main culprit is Congress, for enacting the RLA in the first place and for refusing to correct its pro-monopoly bias now, even as the destructive union cartel it perpetuates wipes out thousands of jobs and threatens to destroy tens of thousands more, along with several venerable companies.
If the now-infamous U.S. Airways Christmas 2004 sick out finally leads Congress to seriously consider abolition of the RLA’s monopoly-bargaining and forced-dues provisions, then thousands of passengers will not have been stranded and thousands of pieces of luggage will not have been misplaced in vain.